Deal #1388

Location

Location #1

Spatial accuracy level
Exact location
Location
Bomi, Liberia

Latitude
6.722204078515199
Longitude
-11.000731723632839
Target country
Liberia
Comment on location
Bomi; Gbarpolu; Grand Cape Mount; Bong counties. SPOTT website (http://www.sustainablepalmoil.org/company/sime-darby-plantation-sdn-bhd/#map) provides exact location of plantations (A-K).
General info

Land area

Intended size (in ha)
311987.0
Size under contract (leased or purchased area, in ha)
[1954] 120000
[2009] 220000
Size in operation (production, in ha)
[2014] 10000
[2016] 3000
[2018] 10400
Comment on land area
120000ha original concession from 1954, 100000ha additional per 2009 to be planted. Gross concession area is 311987ha. Plus 44,000ha for outgrowers. According to a company's representative, 3,000ha of oil palm had been established over a period of 8 years. Another website states that the total concession area is 316 912ha. Liberia National Concession portal states 310 000 ha.

Intention of investment

Intention of investment
Agriculture unspecified (176000 ha)
[current] Non-food agricultural commodities (44000 ha)
Comment on intention of investment
80% oil palm and 20% rubber

Nature of the deal

Nature of the deal
Lease

Negotiation status

Negotiation status
[2009] Concluded (Contract signed)
Comment on negotiation status
company hopes to achieve full capacity in 2023. Another source states start date is 26:06:2009.

Implementation status

Implementation status
[2010] In operation (production)
Comment on implementation status
company hopes to achieve full capacity in 2023. 200 hectares of plantations was destroyed by a fire which occurred in March 2014. The cause of the fire is unknown. No new areas have been planted in 2017 or 2018. The company is considering pulling out of the project. There are reports in January 2019 that the company is looking to sell its shares in the plantation, however the company has not confirmed or denied these allegations. In July 2019, the company confirmed that they are looking to either sell the land to another company (looking at three options- all unnamed at this stage), or give the plantation back to the government. The firm will exit the country at the end of 2019.

Leasing fees

Annual leasing fee
5
Annual leasing fee currency
US Dollar ($)
Annual leasing fee type
per ha
Comment on leasing fees
US$5.00/yr/dev ha, US$1.25/yr/undev ha (8yrs), US$2.00/yr/undev ha (55yrs). To be reviewed every 5 years but not to increase more than 20% The company paid US$187.500 surface rental for the period 1 July 2010 - 30 June 2011 (=US$0.85/ha)

Contract farming

Contract farming
Yes
Not on leased / purchased area (out-grower)
Yes
Not on leased / purchased area (out-grower, in ha)
44000
Contracts

Contract #1

Contract date
2009-07-23
Duration of the agreement (in years)
63
Comment on contract
Another data source states 26:06:2009
Employment

Number of domestic jobs created

Jobs created (domestic)
Yes
Planned number of jobs (domestic)
20000
Current number of jobs (domestic)
[2012] 1600
Comment on jobs created (domestic)
One worker has threatened to set himself ablaze unless the company pays him compensation for dismissal- the company did not give an adequate reason for the dismissal and has not given compensation. Workers are only paid $5.51 per day on Sime Darby plantations. Workers are unhappy with the poor wages and working conditions. In line with the company exit strategy, workers have been retrenched from July 2019.
Investor info

Operating company

Operating company
Sime Darby Plantation (Liberia) (#37085)
Comment on investment chain
Sime darby acquired the original concession through merger with Kumpulan Guthrie Berhad in 2007 who started the plantation before the civil unrest. Sime Darby receives financial assistance from European banks and pension funds including the Norwegian pension fund, UK-based Schroder investment management and Dutch funds PfZW

 

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Data sources

Data source #1

Data source type
Research Paper / Policy Report
URL
http://www.wrm.org.uy/countries/Africa/Oil_Palm_in_Africa.pdf
File
Date
2010-01-01
Comment on data source
"Oil palm in Africa: Past, Present And Future Scenarios", by Ricardo Carrere, from World Rainforest Movement

Data source #2

Data source type
Research Paper / Policy Report
URL
https://www.grain.org/article/entries/5492-the-global-farmland-grab-in-2016-how-big-how-bad
File
Comment on data source
Grain-The global farmland grab in 2016: how big, how bad?

Data source #3

Data source type
Media report
URL
http://www.theglobeandmail.com/news/world/land-rush-leaves-liberias-farmers-in-the-dust/article4570938/
File
Date
2014-01-06
Comment on data source
Land rush leaves Liberia's Farmers in the Dust

Data source #4

Data source type
Media report
URL
http://www.farmlandgrab.org/post/view/23929-palm-oil-poverty-and-imperialism-a-reality-check-from-liberia
File
Date
2014-09-10
Comment on data source
Farmland Grab- Palm oil, poverty and ‘imperialism’: A reality check from Liberia

Data source #5

Data source type
Media report
URL
http://www.farmlandgrab.org/post/view/22248
File
Date
2013-06-24
Comment on data source
Farmland grab- European investments assist landgrabs in Liberia

Data source #6

Data source type
Media report
URL
http://www.commercialpressuresonland.org/press/palm-oil-kernel-development-african-countries-liberia
File
Date
2011-01-01
Comment on data source
Is palm oil a kernel of development for African countries like Liberia?

Data source #7

Data source type
Research Paper / Policy Report
URL
http://www.globallandproject.org/arquivos/GLP_report_01.pdf
File
Date
2010-01-01
Comment on data source
GLP Report, International Project Office and authors

Data source #8

Data source type
Media report
URL
http://www.farmlandgrab.org/post/view/23782-liberia-dismissed-sime-darby-employee-threatens-to-set-himself-ablaze#sthash.0WgBLUQJ.dpuf
File
Date
2014-07-29
Comment on data source
Farm Land Grab- Liberia: Dismissed Sime Darby employee threatens to set himself ablaze

Data source #9

Data source type
Media report
URL
http://www.commercialpressuresonland.org/p/1938#more-1938
File
Date
2009-05-05
Comment on data source
Commercial pressures on Land- Liberia: Malaysian Firm Clinches Deal to Grow Palm, Rubber

Data source #10

Data source type
Other (Please specify in comment field)
URL
http://www.sustainablepalmoil.org/company/sime-darby-plantation-sdn-bhd/
File
Comment on data source
SPOTT- Sustainable Palm Oil Transparency Toolkit. Company Profile: Sime Darby Plantation Sdn Bhd

Data source #11

Data source type
Research Paper / Policy Report
URL
http://www.rightsandresources.org/wp-content/uploads/Communities-as-Counterparties-FINAL_Oct-21.pdf
File
Date
2014-10-30
Comment on data source
Communities as Counterparties : Preliminary Review of Concessions and Conflict in Emerging and Frontier Market Concessions.

Data source #12

Data source type
Contract
URL
http://www.openlandcontracts.org/contract/ocds-591adf-3371037354/view#/
File
Open Contracting ID
ocds-591adf-3371037354

Data source #13

Data source type
Research Paper / Policy Report
URL
http://www.rightsandresources.org/documents/files/doc_5715.pdf
File
Comment on data source
Rights and Resources Initiative- The Financial Risks of Insecure Land Tenure: An Investment View, December 2012.

Data source #14

Data source type
Company sources
URL
http://www.simedarby.com/Core_Businesses.aspx
File
Comment on data source
Company website

Data source #15

Data source type
Research Paper / Policy Report
File
Date
2014-11-03
Comment on data source
Commercial farms in Africa- received from Ward

Data source #16

Data source type
Government sources
URL
http://www.leiti.org.lr/doc/leiti4rp2.pdf
File
Comment on data source
Leite 4th Reconciliation Report

Data source #17

Data source type
Media report
URL
http://www.farmlandgrab.org/post/view/23290-fire-destroys-200-hectares-of-sime-darby-s-liberia-plantation
File
Date
2014-03-19
Comment on data source
Farm Land Grab- Fire destroys 200 hectares of Sime Darby's Liberia plantation

Data source #18

Data source type
Personal information
Date
2016-03-30
Comment on data source
WC had conversation with Wytse Vellema who had talked to a company representative

Data source #19

Data source type
Research Paper / Policy Report
URL
http://www.bastamag.net/IMG/pdf/Rap_LiberiaEN.pdf
File
Comment on data source
Friends of the Earth. "Live of drive, a choice has to be made. A case study of Sime Darby operations in Liberia"

Data source #20

Data source type
Other (Please specify in comment field)
URL
http://portals.flexicadastre.com/liberia/
File
Comment on data source
Liberia National concession portal

Data source #21

Data source type
Media report
URL
https://www.reuters.com/article/us-sime-darby-plant-africa/sime-darby-plantation-considers-exiting-west-africa-palm-oil-operations-sources-idUSKCN1QB0BT
File
Date
2019-02-22
Comment on data source
Sime Darby Plantation considers exiting West Africa palm oil operations: sources

Data source #22

Data source type
Media report
URL
https://www.liberianobserver.com/news/gol-helps-sime-darby-to-raid-plantation-of-illegal-residents/
Publication title
GoL Helps Sime Darby to Raid Plantation of Illegal Residents
Date
2019-03-29

Data source #23

Data source type
Other (Please specify in comment field)
URL
https://chainreactionresearch.com/sime-darbys-potential-liberian-divestment-emphasizes-esg-risks/
Date
2019-02-14
Comment on data source
Opinion piece

Data source #24

Data source type
Company sources
URL
http://www.simedarby.com/investor/annual-reports
Publication title
2018 Report

Data source #25

Data source type
Media report
URL
https://frontpageafricaonline.com/business/liberia-sime-darby-to-leave-end-of-2019/
File
Publication title
Liberia: Sime Darby to Leave End of 2019
Date
2019-09-02

Data source #26

Data source type
Media report
URL
https://themalaysianreserve.com/2019/09/03/sd-plantation-in-talks-with-3-firms-to-dispose-of-liberia-land/
File
Publication title
SD Plantation in talks with 3 firms to dispose of Liberia land
Date
2019-09-03
Local communities / indigenous peoples

Consultation of local community

Community consultation
Limited consultation
Comment on consultation of local community
The company started discussions with the community after the appeal, however these were stopped by the president, stating that the community undermined the government. In 2016 the company has consultation with community with mediator (NGO or govt representative) rather than direct consultation with the aim to reduce conflicts. Before the company can start planting, it needs the approval of the local people.

How did the community react?

Community reaction
Rejection

Presence of land conflicts

Presence of land conflicts
Yes

Displacement of people

Number of people actually displaced
0
Comment on displacement of people
No displacement of people is allowed. Instead, the company needs to reach an agreement with the local population before planting on "community-owned" land can commence. However communities claim that people were forcibly displaced.

Negative impacts for local communities

Negative impacts for local communities
Environmental degradation
Cultural loss
Displacement
Comment on negative impacts for local communities
Communities claiming that Sime Darby had forcibly displaced people from their land, destroyed sacred sites including graves, damaged their crops and sullied their water sources.

Promised or received compensation

Promised compensation (e.g. for damages or resettlements)
The community and the company agree on compensation proposed by the community such as the building of a school, roads or rice growing for the community

Promised benefits for local communities

Promised benefits for local communities
Health
Education
Capacity Building

Presence of organizations and actions taken (e.g. farmer organizations, NGOs, etc.)

Presence of organizations and actions taken (e.g. farmer organizations, NGOs, etc.)
In 2011, communities submitted a complaint to the industry body, the Roundtable on Sustainable Palm Oil, claiming that Sime Darby had forcibly displaced people from their land, destroyed sacred sites including graves, damaged their crops and sullied their water sources. Following an investigation the company was forced to remedy much of the damage caused. "Sime Darby suspended operations in a contested area and agreed to bilateral negotiations. In 2012, expansion of the plantation over local residents’ property had continued, with compensation remaining either inadequate or absent and consultation non-existent."
Former use

Former land owner (not by constitution)

Former land owner
State

Former land use

Former land use
Commercial (large-scale) agriculture

Former land cover

Former land cover
Cropland
Produce info

Detailed crop, animal and mineral information

Crops area
Oil Palm (10280 ha)
[current] Rubber tree (121 ha)

Use of produce

Has domestic use
Yes
Has export
Yes
Comment on use of produce
Only 0.1% for domestic use 10,000ha of palm oil is required for the smallest mill that can supply the local market. Only with 50,000ha planted can the company build a refinery that allows for export.

In country processing of produce

In country processing of produce
Yes
Comment on in country processing of produce
Oil palm production
Gender-related info

Any gender-specific information about the investment and its impacts

Comment on gender-related info
One report states that the working conditions are especially negative for women.
Overall Comment

Overall comment

Overall comment
An initiative comprised of the private sector, civil society and the Liberian government found Sime Darby culpable of failing to comply with local land laws; and of failing to conduct public consultations or produce due diligence reports as required by Liberian rules – directly contradicting investor policies that require companies to respect national laws and environmental regulation. $200 million investment however the company has not broken even yet and had an impairment of $27 million for 2018 year end. Several illegal palm processors have established themselves within the plantations, the Liberian National Police have raided the plantations in March 2019 to root out the illegal processing. In July 2019, the company confirmed that they are looking to either sell the land to another company (looking at three options- all unnamed at this stage), or give the plantation back to the government. The firm will exit the country at the end of 2019.
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